Mr. Blair made his comments amid signs that Iran's European negotiating partners are growing tired of the impasse over Iran's efforts to process uranium that could fuel a nuclear energy plant, or an atomic bomb.
Mr. Blair told a news conference the United Nations should consider sanctions against Iran if it resumes conversion of uranium ore.
"We certainly will support referral to the U.N. Security Council if Iran breeches its undertakings and obligations," Mr. Blair said.
Britain has joined France and Germany in negotiations with Iran aimed at convincing Tehran to give up its uranium enrichment program, which Washington views with suspicion. Tehran says it only aspires for peaceful nuclear energy generation, not a bomb.
Prime Minister Blair says there is still time for diplomacy to work, and he says it is premature to consider military options.
"Nobody is talking about invasions of Iran or military action against Iran. We have to make sure that this diplomatic process works and we'll fight very hard to do that," Mr. Blair said.
The Europeans have offered Iran political and economic incentives to give up uranium enrichment, but the talks have dragged on for a year with little evident progress. Following the latest meeting on April 29 in London, Iran announced intentions to inform the U.N.'s International Atomic Energy Agency it would resume uranium ore conversion.